India is caught on the horns of an energy and environmental dilemma.
Its economy is driven by fossil fuels and every report on India’s energy future forecasts that coal and oil will dominate the energy basket. British Petroleum’s “BP Energy Outlook: 2019 Edition” avers, for instance, that fossil fuels (coal, oil and gas) will account for between 70 and 75 per cent of India’s primary energy consumption in 2040. This is down from approximately 90 per cent today.
Coal will remain dominant, with a 45 per cent share, and oil will trail in second place, with a 20 per cent share. The share of natural gas will stay stagnant at 7 per cent, whereas renewables will increase from the current levels of 3-4 per cent to 15 per cent.
Reports also highlight the unhealthy nexus between energy demand and the environment. Though India will meet the commitment it made at the Climate Change Summit (Paris, 2015) to reduce greenhouse gas (GHG) emissions by 35 per cent over 2005 levels, it will still be among the largest emitters of GHGs in the world. The World Bank has estimated that the cost of air pollution in 2016/17 was equivalent to 8 per cent of India’s gross domestic product (GDP).
The question that has been the subject of much debate and discussion within the policy corridors of governments is: What must be done to resolve this dilemma? How can India pull itself off these horns?